Could These Drugs Wind Up Bankrupting Medicare?

Could These Drugs Wind Up Bankrupting Medicare?
September 26 01:00 2015

Could These Drugs Wind Up Bankrupting Medicare?

For senior citizens in the United States there are two constants to look forward to: a Social Security benefit payment and Medicare coverage. These two entitlements are arguably indispensable when it comes to ensuring financial and physical health.

Unfortunately, neither entitlement program is exactly “healthy.” Social Security is projected to burn through its remaining cash reserves by 2033, while the Trustees suggest that the Medicare Hospital Insurance Fund will be depleted by 2030 (also known as Medicare Part A). Medicare Part B, which covers the cost of physician and outpatient visits, and Part D (prescription coverage) are expected to be adequately financed for the next 75 years.

But what if the Trustees are wrong?

The real problem with Medicare

At present, the Trustees project that healthcare costs for Parts B and D will account for 3.8% of U.S. GDP by 2089. That’s up from the 2% they accounted for in 2014. But what if the rising costs of prescription drugs isn’t being properly accounted for? We’ve seen a number of variables change in the drug development space in recent years that could wind up altering the trajectory of drug cost inflation in the coming decades…

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